China, Taiwan Expected To Move To Scheduled Flights

January 20, 2009

China and Taiwan will change regular chartered flights into scheduled flights this year, a Taiwan official said on Tuesday, a move that could lift Taiwan's ailing airlines by giving them more scheduling flexibility.

Negotiators will at least allow regular scheduled flights between Taiwan and popular Chinese cities such as Shanghai and Beijing, but may also keep some less popular existing routes as charter flights, said Chang Jung-kung, China affairs director of the ruling Nationalist Party (KMT).

China has claimed sovereignty over self-ruled Taiwan since the end of the Chinese civil war in 1949 and vowed to bring the island under mainland rule, by force if necessary.

But ties have improved rapidly since China-friendly Taiwan President Ma Ying-jeou took office last May, fostering new trade and transit links between the two sides, which are just 160 km (100 miles) apart.

Daily charters, launched on December 15 as a precursor to daily scheduled flights, are running about 30 percent empty in part because the two governments rather than the carriers picked the routes and timetables to stimulate tourism.

A pact on scheduled flights would lift Taiwan's carriers, including China Airlines, Eva Air and TransAsia Airways, said Daniel Soh, an economist with Forecast in Singapore.

"It would be more competitive and more convenient," Soh said. "It will be a strong boost to Taiwan aviation in the long term."

The airlines had expected a second year of combined losses in 2008 with any hope for turnaround hinging on China flights.

Taiwan and China should reach a deal at one of the two formal talks expected to take place later in the year, Chang said.

"Basically there are few disputes, just some technical issues to settle," Chang said.

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